Telefonica launches skype rival

Telefonica, the owner of O2 and Movistar is launching an app capable of making calls over the internet, posing a challenge to Skype, Viber and Whatsapp. But the owner of O2 said it would "rather keep the customer than lose them to other products and services".

User can make calls and send messages without using up their quota of call minutes or texts.Photographs, location information and voice messages can also be sent with all data stored on Telefonica's servers. Actions taken by "Tu Me" will instead be deducted from data allowances.

Tu Me is free to download and will be promoted to members of Spanish telecom Telefonica's O2, Movistar and Vivo networks. The company has about 300 million customers across the world. However, subscribers to other brands will also be able to use the program.

Both the caller and recipient must have the app installed for it to work. Users will receive a pop-up notification when someone is trying to get in contact, prompting them to launch the software. Unlike Skype, users cannot make calls to normal telephone numbers.

The service will initially be limited to Apple's iPhones, with a version to follow for Google's Android system.